GERMANY: The German government's plan to extend operating lifetimes of nuclear power plants has turned out to be more difficult than envisaged.

Far from being a bridging technology until it can reliably replaced by renewable energies, as the government stated in its coalition contract after national elections in September 2009, allowing nuclear reactors to run for longer is likely to collide head-on with expansion of wind energy and other renewables.

The plan is also likely to strengthen the oligopoly of four major energy generators and undermine the economic foundation for many power station investments, including wind energy, launched by small energy companies.

The whole electricity sector is now on tenterhooks as to what arrangements the government will eventually come up with for nuclear.

The nuclear plant operators had hoped for a framework early in the year, since some reactors are already threatened with closure under Germany's nuclear phase-out rules. But the date for clarification keeps shifting.

The authorities have variously said it will be made in July, the end of August, or even as late as this autumn, when a new national energy strategy for Germany is due. Reactor operators have rescued their plants from closure by temporary shutdowns and transfer of generation quotas from one plant to another.

The government plans to cream off most of the additional profits arising from extended reactor running times and use these for a viable and sustainable energy supply. The government's pledge that such uses will include "for example ...

researching storage technologies for renewable energies" is of no consolation to wind developers.

For instance, as the original developers of the planned Butendiek North Sea offshore station, the Butendiek Partnership, observed at the end of June, how Germany's grid is supposed to function when nuclear power stations stay online simultaneously with thousands of megawatts of new offshore wind stations "is a puzzle".

Germany's nuclear phase-out law was passed in 2001 after more than a decade of anti-nuclear protest, driven partly by the Chernobyl reactor disaster of 1986, but also by incidents that had to be notified to the nuclear supervisory authorities at German reactors, problems surrounding nuclear waste transit and the continuing lack of an end store for nuclear waste.

The phase-out law gave each of the 17 nuclear units, with total capacity of around 21GW, a generation quota that translated into a lifetime of about 32 years and saw the nuclear plants leaving the grid one-by-one over the period to 2022 or 2023.

On the strength of this law, the anti-nuclear lobby desisted from further massive protest. Small energy players planned new gas and coal stations - many of which have not survived the course amid environmental concerns, while municipal and regional energy companies were encouraged to design their own energy strategies focussed on renewable energies and energy efficiency.

But as Frankfurt-based Mainova remarked when presenting its generation strategy to 2015 at the end of June - under which EUR250 million is earmarked for onshore and offshore wind energy - implementation of its investment plans is "influenced decisively" by the political framework, in particular arrangements for extending the running times of nuclear plants.

The reactor owners are Germany's four major energy companies - RWE, E.on, EnBW and Vattenfall Europe - which account for around 80% of total electricity generated in Germany. Keeping their largely written-off reactors online allows them to continue to dominate the electricity market.

Although reactors can generate cheaply, electricity prices will not necessarily fall since, under the market mechanism, the price of power is determined by the most expensive plant on the system - usually old coal or gas plants.

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